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🏠 Mortgages Last updated 3 Nov 2025 EEAT aligned

How to Calculate Mortgage Payment

Use the standard amortization formula to size your fixed monthly mortgage payment. Explore how interest and principal evolve over time and see the total cost before you commit to a loan.

Author
Pawan, M.Tech (Data Science)
Reviewed by
CalcArena Finance Desk
Applicable Regions
Worldwide (USD example)

Enter your loan details

We calculate monthly payment, total cost, and interest using the fully amortizing mortgage formula. All computations run on this page—no data leaves your browser.

$

Typical down payment excluded; adjust for any closing costs you plan to finance.

%

Use the nominal APR quoted by your lender. Adjustable-rate loans require separate modeling.

years

Half-year increments support 15.5 or 20.5 year loans. We convert to months internally.

Monthly payment

$0.00

Total paid

$0.00

Total interest

$0.00

Year 1 interest paid $0.00
Year 1 principal repaid $0.00
Balance halfway through term $0.00
Month principal overtakes interest —

Interactive payoff chart

Hover to inspect outstanding balance and cumulative interest at any year marker.

Outstanding balance
Cumulative interest

Mortgage payment TL;DR

Borrowing $300,000 at 6.25% APR for 30 years creates a monthly mortgage payment of $1,847.15. Over the life of the loan you will repay $664,974.58, of which $364,974.58 is interest—classic amortization math in action.

How to use this calculator

  1. Enter the loan principal (the amount you expect to borrow after your down payment).
  2. Provide the nominal annual interest rate (APR) quoted by your bank or lender.
  3. Select the number of years you will take to repay the mortgage; the tool converts this to months.
  4. Review the calculated monthly payment, total of payments, and total interest.
  5. Hover over the chart to see how balance and interest change year by year.

Formula & variables

PMT = P × [i × (1 + i)n] / [(1 + i)n − 1]
P
Loan principal (amount borrowed).
i
Periodic interest rate (APR ÷ 12 for monthly payments).
n
Total number of payments (years × 12).
PMT
Fixed monthly payment covering interest and principal.

The formula comes from discounting a stream of fixed monthly payments back to the present value equal to the loan amount. It assumes payments are made at the end of each month (ordinary annuity). If the interest rate is zero, the formula simplifies to P ÷ n.

Worked example

All numbers are rounded to two decimals for clarity; the calculator keeps full precision internally.

Input Value
Loan principal (P)$300,000
Annual interest rate6.25% APR
Monthly rate (i)0.0625 ÷ 12 = 0.0052083
Term (n)30 × 12 = 360 months

1. Compute the growth factor: (1 + 0.0052083)360 = 6.2683.

2. Numerator: 0.0052083 × 6.2683 = 0.032034.

3. Denominator: 6.2683 − 1 = 5.2683.

4. PMT = 300,000 × (0.032034 ÷ 5.2683) = $1,847.15.

5. Total paid = PMT × 360 = $664,974.58.

6. Total interest = Total paid − 300,000 = $364,974.58.

Edge cases checked

  • When APR = 0, the formula safely switches to P ÷ n so you repay principal evenly.
  • Loan term must be at least 1 month (0.0833 years); we enforce term_years > 0.
  • Principal must be positive; otherwise the calculator returns “—” instead of NaN.

Key assumptions

  • Payments are made monthly at the end of each period (ordinary annuity).
  • APR remains fixed for the entire term; adjustable-rate products require scenario modeling.
  • No additional escrow items (taxes, insurance, PMI) are included in the payment result.
  • All computations assume fully amortizing payments with no balloon amount at the end.
  • The calculator is educational; consult your lender before committing to a mortgage.

Underlying concepts

Amortization schedules

A fully amortizing mortgage converts a lump sum principal into equal periodic installments. Each payment covers accrued interest first, with the remainder reducing principal. As the balance shrinks, the interest portion declines and more of each payment goes toward principal.

Time value of money

The mortgage payment formula treats the loan as the present value of an annuity. Discounting all future cash flows at the periodic rate yields today’s loan amount. Rearranging that relationship produces the familiar PMT expression used by banks, spreadsheets, and financial calculators.

Frequently asked questions

How is mortgage payment calculated when the interest rate changes? +

This calculator handles fixed-rate mortgages. For adjustable-rate loans you must re-run the amortization each time the rate resets, using the remaining balance as the new principal.

What happens if I make extra payments? +

Extra principal payments reduce the outstanding balance faster, cutting total interest and shortening the term. Add the extra amount to your monthly payment and recompute or model a custom schedule.

Why is the early interest portion so high? +

Interest is calculated on the remaining principal each month. Early in the schedule the balance is large, so interest dominates. As principal drops, the interest portion shrinks and principal repayment accelerates.

Related calculators

Mortgage Payment Calculator

Model different loan sizes and rates with optional extra payments.

Mortgage Payoff Calculator

See how extra principal payments shorten your payoff timeline.

Loan Amortization Schedule

Download full payment tables with monthly principal and interest splits.

References

  1. Bank of America – Mortgage payment calculator
  2. Bankrate – Mortgage calculator
  3. Federal Reserve Bank of St. Louis – 30-Year Fixed Rate Mortgage Average in the United States
  4. U.S. Bank – Mortgage payment calculator
  5. Fannie Mae – Mortgage calculator

About this calculator

Prepared by the CalcArena Finance Desk using authoritative mortgage math and reviewed for EEAT compliance. Educational guidance only—talk to a licensed advisor before locking in a mortgage.

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